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Retailers Association of India (RAI) feel reduction in corporate tax to 25 per cent for MSME (medium, small & micro enterprises) companies with turnover up to Rs 250 crore is a welcome move, which will benefit a large number of retailers. As Kishore Biyani, Group CEO, Future Group says, textile, footwear and leather industries will benefit from this Budget. The steps announced in the budget will help attract larger corporate investments in the sector and make it more attractive for players like Future Group to establish stronger linkages between the farmers of rural India and consumers of urban India. India is home to almost every climatic zones the world has, and therefore has the ability to produce almost every food produce. Investments in processing this produce will go a long way in helping more than half of the country’s population earn more for the hard work they put in their fields.
The government’s focus on easing the labour norms and the budgetary support towards the textile and footwear industry will help the sector immensely. Most of players in this segment are MSMEs and the linking of Trade discounting system (TReDS) with the GST network, the MUDRA scheme and increasing financing options for them will bring in more ease in conducting their business. The textile, footwear and leather industries are among the largest employing sectors in India and will benefit from this budget.
Retailers views
Kumar Rajagopalan, CEO, Retailers Association of India (RAI), elaborates agriculture, infrastructure, healthcare and rural development seem to be the key focus areas of the Budget 2018. The immediate impact on consumption, either negative or positive, are not expected. There is no real additional money in the hands of the middle class with which consumption can improve. However, the basic necessities of the poor will be met because of the various schemes announced. The proposed reduction in corporate tax to 25 per cent for MSMEs with turnover up to Rs 250 crore is a welcome move, which will benefit a large number of retailers. They will be able to save on taxes that they would have otherwise paid at a higher rate. Overall, the budget is pro-poor, and one with a long-term impact with no immediate benefits for retail sector.
Analyst’s perspective
Anil Talreja, Partner, Deloitte India on Consumer Business says one of the subtle repercussions of the Union Budget 2018 is towards strengthening collaboration of domestic sourcing with the global retailers. Recently, there was refresh announcement made regarding allowance of 100 per cent investment in single brand retail trade by foreign investors. It is known that 30 per cent sourcing condition plays an important role in such cases. Some global retailers who have no dealing with Indian sourcing companies were nervous of meeting such mandatory requirement. The sourcing of 30 per cent of the value of goods purchased needs to be done from India, preferable from MSMEs, village and cottage industries, artisans and craftsmen in all sectors.
Aashish Kasad, Partner C consumer products and retail sector tax leader, EY India, point out corporate tax rate reduction to 25 per cent should benefit smaller organisations. Budget 2018 continued to deliver on the government’s stated development agenda of enhancing the rural economy and doubling the farmers’ income, supporting the poor and underprivileged, developing the infrastructure, promoting digital economy and prudent fiscal management. There are several positive measures for boosting the agricultural economy including the food processing sector in terms of MSP for farmers for the Kharif crop to be increased to 1.5 times the cost of produce as well as Farmer-Producer Organisations to be entitled for a 100 per cent tax deduction for the AY 2019-20 until AY 2024-25, if their total turnover is less than Rs100 crore in a year. Further to incentivise manufacturers of apparel, footwear or leather products to boost the employment generation, the employment day criteria has been relaxed for availing the tax deduction.
The corporate tax rate has been reduced to 25 per cent for companies having a turnover of less than Rs 250 crore in FY 2016-17, which should benefit smaller organisations in ploughing back profits to grow the business further. To further promote the ‘Make in India’ initiative, customs duty has been hiked on import of several consumer products. Overall, the budget has stayed the government’s course of driving growth while trying to curtail the rise in fiscal deficit and inflation.
Spinexpo, a professional trade exhibition dedicated to promoting innovation in yarns, fibres and knitwear, is set to open doors to an international audience and buyers from February 6 to 7 in Paris. Unveiling a highly anticipated avant-première of Spring/Summer 2019 collections to the European markets, Spinexpo brings new inspiration with collections and innovative product offerings from a selection of leading international exhibitors encompassing yarn, fibre and knitwear.
The organisers say, “Our Shanghai-based exhibition has been an on-going catalyst for the textiles and fashion industry and continues to be a driving force in moving both suppliers and buyers forward, urging them to bring newness in design and innovative technical applications to the market. Buyers have come to recognise Spinexpo as a place of paramount importance, the vanguard of cutting-edge ideas, creativity and inspiration.”
Many exhibiting companies have been suppliers to European textiles organisations and are now directly showcasing their creativity, providing better lead-time in the delivery of products and offering bespoke personalised services. Esquel Group is presenting their new, unique ultrafine merino originating from Lindis, New Zealand — Lindis Ultra fine merino wool ranges between 10.6 to 14.5 microns, with cashmere ranging from 13 to 15.5 and standard wool ranging from 16 to 35 microns.
Lindis Merino is a naturally elastic fibre due to its unique helical molecular structure. It is naturally breathable and hygroscopic, making garments very comfortable to wear, providing thermal retention and a soft hand-feel.
The Esquel Group is proposing a new yarn made by blending its premium extra–long-staple cotton from its own avant-garde ecological farm with Lindis ultra-fine merino wool, achieving the balance between softness and warmth. The company explains in a statement, “This will allow upmarket brands to differentiate from their competitors.”
UPW has taken the challenge to produce intelligent future yarns that are sustainable. One of the yarns in focus for this coming Spring/Summer 2019 is Tropical – a 2/32 Nm, 25 per cent recycled cotton, 30 per cent cotton, 45 per cent UV resistant polyester, machine washable protection yarn which shields the skin from harmful UVA and UVB rays, has mosquito repellence and responsibly uses recycled cotton fibres.
The minimum wage board for the Bangladesh cotton textile sector has finalised its recommendations, providing Tk 5,710 as gross monthly pay for the sector workers. Currently, the minimum wage for this sector is Tk 3,302 which was set in 2011.The wage board published the proposal along with other recommendations in a gazette notification on January 24, they were asking for any written objections against or suggestions on the recommendation in 14 days.
Both owners and workers representatives to the wage board said the board made the recommendation ‘unanimously’ while labour leaders said that the proposed amount was not acceptable. Wajed-ul Islam Khan, a veteran labour leader and former coordinator of Sramik Karmachari Oikya Parishad, said the amount of proposed minimum wage for the cotton textile sector was not acceptable. “It is not possible at all for a worker to meet the monthly expenditure of family with Tk 5,710. I don’t know how the wage board has proposed such a poor amount as the minimum wage,” he said.
In its recommendations, the wage board has incorporated 10 grades for workers and six grades for employees in the sector. The government formed the wage board in April last year to review the minimum wage for the cotton textile sector workers within six months. Later, the government extended the time by six more months and the board members visited several textile and spinning mills to assess the living standard of workers, productivity, production costs, prices of products and strength of the sector. After the assessment, the board has proposed Tk 5,710 as the minimum monthly wage for the workers in grade-10.
The ITM 2018 International Textile Machinery Exhibition will be held in Istanbul from April 14 to 17, 2018. With the participation of hundreds of manufacturers showcasing leading technologies and worldwide industry investors and trade delegations that are expected to come, the event will be a spectacular textile show. ITM Exhibition, besides being the largest exhibition of Turkey and the Middle East, is also one of the most important organisations of the industry globally.
The ITM 2016 Exhibition, saw a 100 per cent occupancy rate with 1,200 exhibitors and representatives and approximately 50,000 visitors from 76 countries worldwide. A new record is expected to be broken on both exhibitor and visitor front at ITM 2018 where all halls are full. ITM 2018 will become a textile technology extravaganza with the participation of leaders of the textile world, those serving all subsectors of the industry, from cotton to yarn, weaving to knitting and digital printing to dyeing and finishing.
It will sees worldwide product launches of many domestic and international companies. Another important aspect is the visa agreements between Turkey and countries including India, Pakistan, Bangladesh, Indonesia, Vietnam, Egypt, Algeria, Tunisia, Morocco, Iran, Uzbekistan and Turkmenistan which will ensure numerous visitors from these countries.
ITM 2018 will concurrently host Hightex 2018, the Istanbul Yarn Fair and the ETT2018 Conference at the same time.
The Union Budget for 2018-19 has drastically reduced the allocation for the handloom sector by more than a third from Rs 604 crore to Rs 386.09 crore. The industry which is already suffering under the twin effects of demonitisation and GST, is critical of this move. Industry representatives say this is the lowest the handloom sector, which employs over 1 crore people, has seen in the last century. Narasimha Reddy Donthi, President, Chetna Society, a non-governmental organisation avers, “Handloom sector budget is reduced drastically, by 36 per cent, across all schemes. With rising cost of production, unfair competition and subsidies to rival sectors, handloom sector is being killed deliberately.” He added huge cuts in yarn supply scheme allocations is bound have its impact. This impact would be double when one considers the rising costs of raw material, mostly yarn (silk, cotton, wool and other natural fibres), due to inflation, GST and fossil fuel prices.
The industry is borrowing money at exorbitant interest rates, ranging from 14-60 per cent, adding to its debt burden. Reddy said, the most critical component of their production, working capital flows are drying up from ‘traditional sources’ and institutional mechanisms. The National Bank for Agriculture and Rural Development (NABARD), the only comparatively cheap source of finances for handloom sector has drastically reduced its exposure. Resultantly, handloom weavers were forced to find ‘expensive’, private sources of finances.”
Streaming analytics is having a huge impact on the fast fashion retail segment, from customer experience to supply chain management. Streaming analytics is about to transform the fashion industry as a need to analyse data in motion becomes critical for everything from optimising the supply chain through to improving overall customer experience.
Neil Hicks, CEO of Pandesco, a provider of IT services focusing primarily on the fashion industry discloses explains, “Manufacturers of apparel have been applying analytics using batch processes, but as demand for more custom products and services has increased there’s a growing need to be able to optimise manufacturing lines.” The rise of fast fashion, in particular, is putting pressure on supply chains. Apparel manufacturers need to be able to optimise manufacturing lines to deliver the right amount of product based on the latest fashions to hit the runway. That creates an acute need to be able to apply analytics in real time to create more accurate demand forecasts.
Hicks advises manufacturers to make dynamic adjustments to their e-commerce sites to prevent customers from ordering a product that is only going to be available on back order when there isn’t enough material on hand to manufacture it. Streaming analytics will play a significant role in logistics. Rather than relying on store managers to know when to replenish stocks, real-time analytics should enable the distributor to automatically replenish an item whenever it’s out of stock by redirecting allocations of products wherever and whenever necessary, says Hicks.
Much of that capability is going to be enabled by sensor and RFID tags that are now becoming inexpensive enough to attach to garments, says Hicks. Manufacturers not only want to know what’s in stock at any given moment they also want insights into how different types of customers are navigating a retail environment. Armed with that information they may choose to either directly or indirectly enable the retailer to make special offers available. Hicks says that despite all the hype surrounding the Internet of Things (IoT), there is rising awareness of what can be accomplished using sensors and analytics.
The European Commission has repeated its concern over labour rights situation mainly with respect to freedom of association and successful implementation of the 'Compact' in the readymade garment sector of Bangladesh. It warned Bangladesh of taking steps, including launching investigation, to improve the situation ahead of withdrawal of the existing trade facility under the Generalised System of Preference (GSP).
The EC expressed concern and issued a warning in its report on the effects of GSP and the special incentive arrangement for sustainable development and good governance (GSP+) covering 2016-17 to the European parliament and the council. The report, published recently also raised concerns about the declining human and labour rights situations in Cambodia. The EU in particular raised the alignment of the Bangladesh Labour Act (BLA) and the Export Processing Zone (EPZ) Act with the ILO labour rights conventions as one of the priority actions.
Following declining human and labour rights situations in Bangladesh and Cambodia, the commission engaged more actively with these two countries and involved relevant stakeholders like NGOs, CSOs, international organisations, social partners, and businesses. By generating millions of employment opportunities in the readymade garment industry where the large majority of workers are women the EBA (Everything But Arms) has contributed to its socio-economic development.
As per state minister for labour Mujibul Haque Chunnu the labour rights situation has improved and better now, and the government has also formed a new wage board to review the wages of the garment workers for the betterment of their living standard. The EC's latest warning has come after suspension of Bangladesh's GSP benefit by the US government in June 2013. The EU previously reminded Bangladesh authorities about taking necessary measures for ensuring workplace safety and labour rights to sustain its GSP benefit in the EU markets. The EU is the largest market of Bangladeshi products those enjoy duty-free facility under the EBA. Bangladesh fetched $17.75 billion from apparel exports to the EU in last fiscal year which is 63.06 per cent of total RMG exports, according to BGMEA data.
Post the success of the men's Fashion Week in January, a repeat is on the table as new players are entering the market. Now it is the turn of Danish show CIFF to make its appearance. The organisers of Copenhagen's premier fashion show have been looking towards Paris for several seasons but now they are well and truly ready to make their move as they took the opportunity of the edition currently being held in the Danish capital to launch a little teaser campaign.
A panel at the entrance of the Copenhagen show, advertised the dates of the next ‘CIFF Paris: from Wednesday 20th to Tuesday 26th June’. The launch is planned during the men's Fashion Week, with a marginally longer duration than that of its new French competitors. ‘Who's Next is scheduled for June 23 to 25; Man/Woman for June 21 to 25, and Tranoï for June 22 to 24.
CIFF brought together over 2,000 brands from the entire fashion spectrum for its dynamic winter edition: from men’s wear to women’s wear, from formal apparel to jeans, from premium to accessible and designer labels, from footwear to children’s wear. In 2014, CIFF teamed up with the Denim PV show, each giving the other a certain amount of visibility for a few seasons, an initiative aimed at linking up brands and manufacturers. CIFF’s Danish competitor, Revolver, is headed towards Milan and has been associated for several editions with the White show, within which it has a dedicated area. Copenhagen's summer shows, held in August, work hard to attract international visitors, especially from Southern Europe. The new events would permit both CIFF and Revolver to offer a Scandinavian alternative, fitting into a premium slot within the international show calendar.
The Clothing Manufacturers Association of India (CMAI), the apex association of the apparel industry, has welcomed the Union Budget, as positive and growth oriented for the apparel industry. In a statement, Rahul Mehta, President CMAI, says in addition to certain specific provisions for this industry, the general focus of the Budget on rural economy, including significant fund allocations, would help in pushing up demand for apparel in the domestic market. He also welcomed the added emphasis on infrastructure development and stated that apparel manufacturing involved significant domestic transportation of raw materials as well as finished goods and infrastructural bottlenecks have been hindering this industry.
Mehta thanked the FM for enhancing the allocation for the special scheme for the apparel sector from Rs 6,000 crore in 2017-18 to Rs 7,148 crore for 2018-19. While extending government contribution of 12 per cent towards EPF of new employees, which was an element in the special package, to all sectors, its applicability has also been extended to the next three years. This will provide additional momentum to hiring of workers by the apparel industry.
Referring to the reduction of women employees' contribution towards EPF to 8 per cent for the first three years, Mehta pointed out workers in the apparel industry will be among the primary beneficiaries of this provision, since the sector extensively employed women. He also thanked the FM for enhancing the turnover limit from Rs 50 crore to Rs 250 crore for eligibility to the reduced corporate tax rate of 25 per cent and sated that a large number of units in the apparel sector would benefit from this. He stated the enhanced economic growth envisaged in the Budget will help in improving demand for apparel, which is one of the primary needs of the masses. Mehta added the positive impact of the Budget on the apparel industry will also be reflected in job creation, since this is the most labour intensive industry in the country.
"The Hong Kong Trade Development Council (HKTDC) presented a pavilion at the Copenhagen International Fashion Fair (CIFF), the premier fashion event in Northern Europe, from January 31 to February 2 the aim was to assist Hong Kong designers go global. The pavilion, ‘Fashion Hong Kong Gallery’, showcased latest collections from four Hong Kong fashion accessory brands: Cafuné (designer: Queenie Fan), Pomch (designer: Felix Tai), ro and Volare (designer: Franco Yeung). Networking events will also be arranged to provide greater exposure and more business opportunities."
The Hong Kong Trade Development Council (HKTDC) presented a pavilion at the Copenhagen International Fashion Fair (CIFF), the premier fashion event in Northern Europe, from January 31 to February 2 the aim was to assist Hong Kong designers go global. The pavilion, ‘Fashion Hong Kong Gallery’, showcased latest collections from four Hong Kong fashion accessory brands: Cafuné (designer: Queenie Fan), Pomch (designer: Felix Tai), ro and Volare (designer: Franco Yeung). Networking events will also be arranged to provide greater exposure and more business opportunities.
The Fashion Hong Kong Gallery is a feature of the HKTDC’s Fashion Hong Kong campaign, which was launched in 2015 to promote Hong Kong fashion designers and labels in the global fashion arena through a series of international events. These include large-scale runway shows and displays at major international fashion events such as Tokyo Fashion Week, New York Fashion Week and London Fashion Week, as well as Hong Kong pavilions and networking activities at fashion fairs. Northern Europe’s largest and longest-running fashion fair, CIFF has evolved into a major event for the global fashion industry. This edition will feature some 2,000 international labels across various exhibition halls, including Style Setters Bungalows where the Fashion Hong Kong Gallery will showcase Hong Kong’s creativity to global buyers and media, helping the city’s designers and labels expand internationally.
As per Rebecca Tse, Senior Product Promotion Manager, HKTDC, this is the fourth time Hong Kong designers showcased at Copenhagen. This time, the focus was on CIFF and Hong Kong labels of different styles. In addition, they arranged networking events for designers and buyers. The HKTDC will continue to review Hong Kong’s strengths in fashion markets around the world.
Innovative display by budding designers
Among the exhibits was Cafuné is the label of Queenie Fan, a handbag designer born and bred in Hong Kong. Fan studied Industrial Design at the Rhode Island School of Design in the US. Central to the brand is a strong attention to construction and detail, and a devotion to creating a harmonious balance between timeless and playful elements.
The Pomch a brand founded in 2011 by director Felix Tai, a graduate of the Hong Kong Polytechnic University School of Design majoring in industrial and product design. The brand, focussed on handbags, has been featured at global events, including the DMY International Design Festival in Germany and Paris Fashion Week, winning high acclaim from renowned media such as Elle, Marie Claire and Hypebeast.
A graduate of the College of Fine Arts at the University of New South Wales in Australia, Franco Yeung is a designer and merchandiser for more than eight years, working with clients in the US, Italy, Israel and other parts of the world. In 2008, he founded his brand with the name ‘Volare’, an Italian word meaning ‘fly’. Having participated in New York Fashion Week with the HKTDC last February, the designer launched his new collections of men’s and women’s footwear at CIFF.
